Crisp Malting Group Ltd – Harvest 2018 Update by Bob King

Introduction

In the 4 weeks since our last report there has been hardly a drop of rain in northern Europe, whilst temperatures have reached record levels in Scandinavia and UK. The consequence is early harvests, low yields, quality issues (particularly in the malting barley crop) and price levels last seen in 2012. The hot and dry conditions have also had an impact on grain production in Russia and Ukraine.

Crop Prospects UK

Harvesting of winter malting barley in England was finished by mid-July with the majority of it off farm and into maltsters and merchants stores already. Whilst yields are at best only up to the 5 year average or slightly lower, quality is very good. Grain nitrogens are slightly lower than last year whilst grain size is also slightly smaller, in part reflecting the moisture levels 2% below average of the harvested barley. A comparison of this year’s and last year’s harvest intake at our Norfolk maltings and stores shows:

                     2018                    2017
Variety               Nitrogen >2.50mm <2.25mm Nitrogen >2.50mm <2.25mm
Maris Otter 1.39% 79.8% 6.0% 1.46% 86.5% 4.5%
Flagon 1.45% 88.4% 4.0% 1.53% 91.0% 2.8%
Craft 1.48% 89.7% 4.0% 1.64% 92.4% 2.2%

 

With the un-broken dry weather, harvesting of spring barley in England started straight after the winter crop, coming at the same time as winter wheat and oil seed rape on many farms. Due to the wide planting window this spring and the difficult growing conditions, it is no surprise that yields and quality vary enormously not just from area to area but from one farm to the next. So far the best quality samples are coming from areas where the underlying chalk which was saturated during the winter and early spring, allowed spring crops to send roots down to access water and continue growing during the hot dry period from the beginning of May. Grain nitrogens are in general lower than was feared but still significantly higher than in past seasons, however most of the crop produced in southern and eastern England should find a malting home as maltsters raise their nitrogen intake limits. Further north in England, reports are of a more ‘difficult’ crop. Spring barley harvesting has just started in Scotland and it is quickly becoming apparent that grain nitrogens are higher than the industry has been accustomed to in recent years and that yields are lower than the 5 year average, again due to lack of rainfall. what maximum level of grain nitrogen is accepted by the Scottish malting and distilling industry will be debated over the next few days, but merchants are suggesting that the industry will need to accept up to 1.75% (or higher) rather than the traditional 1.65% to achieve anywhere near the total barley requirement, with even higher nitrogen levels on the continent and in England, alternate sources are difficult to contemplate.

Crop Prospects EU

This is a very short paragraph! The summary is not good! Throughout Scandinavia, Poland, Czech and Slovakia the story is the same: low to very low yields and high protein. It is thought likely that for the EU to be barely self-sufficient, barley with up to 13% protein (2.08% TN) will have to be accepted by the malting and brewing industry. Only France and southern Germany have reasonable to good crops.

Markets

EU wheat markets have soared in the past month as the forecast size of the EU and Russian crops continue to decline. Feed barley supplies, already tight at a world level, have been further reduced by the drought and now the first downgrading of EU corn prospects is happening. These rising feed grain markets have been mainly responsible for the dramatic rise in malting barley prices, however it is now the overall supply / demand question that his adding additional strength to the malting barley market. Malting barley prices for ‘standard’ quality have now risen £50 since early June. Competition for the small quantities of low protein barley that is available from maltsters supplying the distilling, craft beer and other specialist markets is intense and will only add further upwards price pressure for specific varieties, origins and qualities.

 

  08/06/18 13/07/18 10/08/18 Difference 13/07–10/08
Nov Wheat Futures £161.50 £169.50 £194.50 +£25.00
Oct FOB 2RS Barley €202 / £177.98 €226 / £200.00 €254 /£228.82 +£28.82

 

 

 

 

 

 

 

 

 

By Bob King

Commercial Director

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